Walter Reed Army Medical Center plans to cut at least 200 jobs early next year in its drawn-out, bitterly contested effort to outsource more work to a private contractor.

The army hospital expects to turn over hundreds of jobs to Florida-based IAP Worldwide Services, whose representatives arrived on the hospital's D.C. campus for the first time this week to start the transition.

The move is part of a larger federal initiative to determine whether government agencies or private companies can do a better job at a lower price.

After five years of protests, employee appeals and congressional counterattacks, a $120 million five-year contract was awarded this January to IAP. Walter Reed is slated to be shut down by 2011 as part of the Defense Department's massive closing and realignment project.

While federal outsourcing isn't new, "the Bush administration has been more aggressive in outsourcing all nonessential services," says Ray Bjorklund, chief knowledge officer for FedSources, a McLean market research firm. "The concept is to go ahead and outsource that stuff so you can concentrate on the core mission."

The Army started a basewide review of Walter Reed in June 2000. The sweeping evaluation of more than 1,100 jobs finally narrowed its focus to an estimated 350 mostly blue-collar maintenance jobs.

IAP started the transition this week by surveying and inventorying base property, setting up its technology networks and interviewing for jobs.

Since the contract was awarded, some staffers have already left for new jobs. Army officials expect the exodus to continue, lowering the estimated layoff total to 200, according to a filing with the D.C. Department of Employment Services.

"As soon as this happens, everybody looks for another job," says Mark Jones, assistant to Joseph Whitaker, the Army deputy assistant for installations and housing. "Most people either take the move or find another job or are placed in priority placement."

IAP is required by federal law to first offer unfilled contract jobs to qualified government employees facing a pink slip, though it is not required to guarantee anyone a final slot.

"We will interview all existing personnel who apply for employment consideration," says Arlene Mellinger, a spokeswoman for IAP, whose majority owner and investor recently anointed former Treasury Secretary John Snow as its chairman.

Walter Reed is just a drop in the bucket for IAP. Last month, the company announced its bid to compete for a $50 billion Army contract to provide food and shelter for soldiers in Iraq and Afghanistan -- a contract long held by KBR, a Halliburton subsidiary that used to employ IAP's top two officers.

IAP has also won grounds and maintenance outsourcing contracts for other Army installations, including Fort Meade in Maryland, but the Walter Reed deal received the most flak.

Union groups and congressional members charged that the six-year process ignored crucial federal deadlines and spawned several versions of the solicitation.

In August, the White House Office of Management and Budget, which says that the contract was awarded fairly, projected cost savings of about $6 million a year for the next five years.